Dolat Capital said the acquisition is strategically compelling, as it materially scales Coforge’s capabilities in AI-first product engineering, data and cloud. It highlighted Encora’s strong presence in HiTech and Healthcare, and its Latin America nearshore base with 3,100+ engineers, as key positives.
However, Dolat flagged three risks:
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Earnings dilution due to 21% equity issuance
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Integration and execution risk in a large cross-border deal
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Margin trajectory amid amortisation costs
The brokerage firm noted that while revenue upgrades for FY27–28 are meaningful, EPS cuts in the near term reflect the cost of growth. It expects volatility around the QIP and fundraise, even as the long-term positioning improves.
DAM Capital said the Encora acquisition is “strategically transformative”, giving Coforge instant scale in AI-native digital engineering and expanding its $10 million-plus client bucket to 45, improving cross-sell visibility.
The brokerage also underlined that the deal will strengthen Coforge’s AI stack, diversify delivery footprint across India and Latin America and accelerate entry into digital-native and platform clients.
But DAM Capital emphasised that the acquisition is financially demanding. It pointed to:
DAM Capital said the valuation of around 3.9x FY26E revenue and nearly 20.6x Ebitda is “full but justified” given Encora’s growth profile, but stressed that EPS neutrality depends on margin delivery of over 15% by FY27.
